Bank of Nova Scotia (Scotiabank) reported healthy growth in Net Interest Income (NII) in 2Q 09. However, net income available to common shareholders declined due to increasing income tax and higher preference dividends. Going forward, we remain cautious as we expect the weak economic environment will continue to depress growth in Scotiabank's loan portfolio, which could impact NII. Therefore we maintain our HOLD rating....

The Bank of Nova Scotia (Scotiabank) common stock has depreciated significantly since our previous update report, reflecting investor concerns over the deteriorating Canadian economy and its impact on the bank’s ability to expand its loan portfolio, as well as the impact on loan defaults of falling property prices. Therefore, although the target price derived in our last update report does not support a HOLD, we maintain our HOLD…

CLICK VIEW REPORT TO READ FREE REPORT

Bank of Nova Scotia’s (Scotiabank) total revenues fell y-o-y in 4Q 08, due to a decline in non-interest income, partially offset by moderate growth in Net Interest Income (NII). NII growth was driven by expansion in the bank’s loan portfolio. Going forward, we remain concerned about the bank’s Net Interest Margin (NIM), in view of rising funding costs and growth in the share of low-yield mortgage products in the bank’s asset mix. Moreover, we…